NEW YORK, July 12 (Reuters) - Cotton futures closed on
Tuesday at a new nine-month low for a second day running due to
investor sales, and weak demand coupled with jitters over the
euro zone crisis could hit values further, brokers said.

The key December futures on ICE Futures U.S. fell
4.49 cents, or 4.12 percent, to end at $1.0439 per lb, dealing
from $1.0388 to $1.0679.

It was the lowest close for the second-position contract
since early October 2010, Thomson Reuters data showed.

The market last traded below the psychological $1 mark also
in October 2010, Thomson Reuters data showed.

Volume traded was almost 21,500 lots at 2:49 p.m. EDT (1849
GMT), nearly 10 percent above the 30-day norm, Thomson Reuters
preliminary data showed.

'Cotton's a pretty sick puppy. We have falling prices
because of falling global consumption,' said Keith Brown,
president of commodity firm Keith Brown and Co in Moultrie,
Georgia.

The softening demand was underscored by a monthly supply
report from the U.S. Agriculture Department, which reduced its
forecast for world cotton consumption in the 2011/12 marketing
year (August/July) to 123.16 million 480-lb bales, from last
month's 123.77 million bales.

World 2011/12 cotton ending stocks were seen rising to 51
million bales from 48.25 million, and total Chinese consumption

in 2011/12 was cut to 46.5 million bales from 47.5 million.
Brown said the market may need to plumb lower, adding that
'we've got to have a huge break in cotton (prices) and uncover
some kind of demand'.

Also bearish for cotton was news that investors dumped the
euro for a third day as moves by officials to stem the European
debt crisis failed to allay concerns of contamination spreading
to Italy and Spain.

Traders said the market continued to monitor conditions in
Texas and the debate in the trade would now turn to how much of
the U.S. cotton crop would be harvested in the autumn.

Open interest in the ICE futures cotton market stood at
137,940 lots as of July 11, ICE Futures U.S. data showed.

Volume traded on Monday stood at 10,155 lots, it added.